Title

Bitcoin Exchanges

Publication Type

Book Chapter

Publication Date

2015

Abstract

Bitcoin exchanges act as the most important third-party intermediary by serving as the gateway for newcomers to step into the Bitcoin world and supporting payment transactions of the users. However, this exchange market continues to puzzle the Bitcoin enthusiasts. Many users may prefer to deposit their Bitcoins in a large exchange for the benefit of lesser fees and better services, but they least expect the underlying risks mentioned in this chapter. With the increase in the liquidity and transaction volume of a Bitcoin exchange, the chances of fraudulent activities and attacks of different magnitudes on that particular exchange are also on the rise. Consistent rules and regulations are being framed by the regulatory entities to protect the Bitcoin network from security breaches, Bitcoin malware, and other thefts. In the future, when Bitcoin is widely accepted as a common medium of exchange in the society, the demand for Bitcoin exchanges might decrease. The number of exchanges that deal only with Bitcoins will decrease and the industry will consolidate, owing to the reduction in the trading activities of Bitcoin against fiat currency, higher compliance cost, and declining transaction fees for exchanges.

Keywords

Bitcoin exchange, Bitcoin security, Lost Bitcoin, Bitcoin theft, Exchange survival time, Transaction volume, Bitcoin compliance, Exchange security threats, Bitcoin funds, Bitcoin fee, Missing Bitcoin

Discipline

Business | E-Commerce

Research Areas

Quantitative Finance

Publication

Handbook of Digital Currency: Bitcoin, Innovation, Financial Instruments, and Big Data

Editor

Lee, David K. C.

First Page

559

Last Page

573

ISBN

9780128021170

Identifier

10.1016/B978-0-12-802117-0.00028-X

Publisher

Elsevier Academic Press

City or Country

Amsterdam

Additional URL

http://dx.doi.org/10.1016/B978-0-12-802117-0.00028-X